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US Fed raises key interest rate

U.S. Federal Reserve Chairman Jerome Powell testifies at a hearing before the U.S. Senate Committee on Banking, Housing, and Urban Affairs on Capitol Hill in Washington, D.C., the United States, Dec. 1, 2020. (Al Drago/Pool via Xinhua)

There was speculation that the Fed might not raise the interest rate at the end of its two-day meeting this week in view of the collapse of the Silicon Valley Bank…reports Asian Lite News

The US Federal Reserve on Wednesday raised interest rate by 25 basis points, which is modest compared to previous hikes aimed at curbing inflation but came amidst uncertainty about the banking system that has taken a hit in the last few weeks triggering fears of a larger problem.

This hike takes the target rate in the 4.75 per cent to 5 per cent range, which is the highest since the start of the recession in September 2007.

The Fed did address concerns about the banking system in a statement. “The US banking system is sound and resilient,” it said. “Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain.”

There was speculation that the Fed might not raise the interest rate at the end of its two-day meeting this week in view of the collapse of the Silicon Valley Bank and trouble at another bank because of rising interest rates, among other reasons. And that it will put on hold its battle against inflation to take stock.

Equally, experts had said, that if the Fed did not hike rates, it would send out an even more dire message: that there was a indeed a problem with the banking system, enough for the central bank to pause anti-inflation interest rate hikes.

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Business Economy India News

RBI hails India’s strong recovery

Reserve Bank of India.

The central bank noted that the overall domestic financial resource balance continued to improve, turning marginally positive at 0.3 per cent of GDP in 2020-21…reports Asian Lite News

Even as global growth is set to slow down or even enter a recession in 2023, as global financial markets wager, India has emerged from the pandemic years stronger than initially thought, with a steady gathering of momentum since the second quarter of the current financial year, as per a RBI report.

The “State of the Economy” chapter of Reserve Bank of India’s (RBI) monthly bulletin for March 2023, released on Tuesday, noted that “on the supply side, agriculture is into a seasonal uptick, industry is emerging out of contraction and services have maintained momentum. Consumer price inflation remains high and core inflation continues to defy the distinct softening of input costs”.

In another chapter titled “Financial Stocks and Flow of Funds of the Indian Economy 2020-21”, the central bank noted that the overall domestic financial resource balance – measured by the net acquisition of financial assets less net increase in liabilities – continued to improve, turning marginally positive at 0.3 per cent of GDP in 2020-21.

Further, the household financial savings spiked significantly during 2020-21 from its long-term trend reflecting an elevated stock of both currency and deposits and increased savings in insurance products.

The balance sheet of the RBI expanded in 2020-21 with a rise in financial assets reflecting unconventional monetary measures to mitigate the impact of the pandemic and to ensure adequate liquidity for smooth functioning of the economy. Other financial corporations with excess inflows from households, and in view of reduced demand for bank credit in the pandemic year, increased investment in government securities.

The non-financial corporations deleveraged their balance sheets in 2020-21; as a result, their net financial wealth improved after years of successive deterioration.

With a relatively reduced dependence on external financing, particularly by the Indian corporates, the growth in both financial assets and liabilities of the rest of the world decelerated in 2020-21, the chapter said.

ALSO READ: Qatar-based Al-Abdullah Group bets big on Kabira Mobility

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Qatar-based Al-Abdullah Group bets big on Kabira Mobility

In line with its growth strategy, Kabira Mobility is intensifying and reinforcing its dedication to innovation and investing in research and development for its products…reports Asian Lite News

Kabira Mobility , a prominent electric bike manufacturer in India renowned for its KM3000 and KM4000 models, announced today that it has secured a USD 50 million investment from its strategic investor, Al-Abdulla Group (Qatar) at an undisclosed valuation to accelerate its Pan-India growth and ramp up the production of its Highly Popular Electric Bike Models KM3000 and KM4000.

This investment will enable Kabira Mobility to embark on mass industrialisation of its products, thus allowing the company to further ramp up its delivery capabilities. To accommodate this growth, Kabira Mobility will expand its manufacturing infrastructure by scaling up its manufacturing capacity at its Dharwad plant and setting up a state-of-the-art electric bike manufacturing plant in Uttar Pradesh to meet the growing demand of the North Indian market. In addition, Kabira Mobility is planning to significantly expand its national presence by ramping up its store network from 30 to 100 by the end of the year. This expansion strategy aims to not only increase customer traffic, but also provide a premium retail experience that will ultimately translate into higher sales and greater market share.

In line with its growth strategy, Kabira Mobility is intensifying and reinforcing its dedication to innovation and investing in research and development for its products. The company is committed to developing the next generation of powertrain and battery pack technology for its upcoming electric bike models, and is ramping up efforts in this area. The aim is to create products that are not only high-performing but also energy-efficient and environmentally friendly.

Furthermore, Kabira Mobility will also be introducing a range of new products that are set to raise the bar of Electric Bikes in the industry. The KM5000, an electric cruiser bike with a range of 330km, is one of the flagship models that will be launched soon. In addition to this, the Pro variants of the KM3000 and KM4000, featuring mid-drive powertrain and industry-leading specs, will also be released. These launches will be consolidating Kabira Mobility’s standing as a frontrunner in the industry and raise the bar of Electric Bike Industry in terms of performance, and design.

During the event, Jaibir Siwach, CEO of Kabira Mobility, expressed, “Electric bikes are set to be the catalyst for growth in the industry and with this investment, Kabira Mobility is poised to lead the charge. Our relentless focus on R&D for the past five years on powertrain & technology development has paved the way for Kabira Mobility and will enable us to capture almost 30% of the electric bike segment and emerge as an industry leader in the next 2 years.”

Also present at the event, Manoj George, CEO of Al-Abdulla Group, stated, “India holds immense potential and is poised to become the manufacturing hub for the global E2W market. Our investment in Kabira Mobility is aligned with Al-Abdulla Group’s vision of investing in the renewable energy sector and supporting sustainable mobility solutions on a global scale.”

The Al-Abdulla Group is a distinguished multinational conglomerate with a diverse portfolio across several industry verticals, including Renewal Energy, Construction, Manufacturing, Textiles, and Printing. With a remarkable legacy spanning several decades, the Group has firmly established itself as a prominent player in the Qatari business landscape, and has made a remarkable global impact with its exceptional business acumen and strategic vision.

At the helm of the Group is Chairman Sultan Johar F Al Abdulla, a visionary leader with a strong acumen for business. Under his dynamic leadership, the Group has achieved remarkable success, with a strong focus on innovation, sustainability, and customer-centricity. His keen eye for detail and ability to identify new opportunities have been instrumental in steering the Group towards newer heights of success.

The Al-Abdulla Group is deeply committed to the renewable sector and has an aggressive focus on Electric Mobility, The Group considers India as one of the largest EV Manufacturing Hubs with an unparalleled market potential. In addition, the Group has plans for capturing the global electric vehicle market with Kabira Mobility. The Group’s commitment to renewable energy is also evident in its investment in Solar Power Plants, Waste to Energy Plants, Windmills, and Desalination plants.

Kabira Mobility, a Classic Group company, is a pioneer electric mobility startup that was established in September 2017 by a team of passionate engineers. Kabira Mobility is dedicated to revolutionising urban transportation by providing a smarter, more accessible, and affordable way for people to commute.

In December 2019, we incorporated as Kabira Mobility Private Limited and in February 2021, we launched our flagship electric bikes, the KM3000 and KM4000, which are one of India’s fastest and longest-riding electric bikes. These bikes are equipped with state-of-the-art technology and user-friendly features that make them appealing to a wide range of riders.

At Kabira Mobility, we are focused on making electric mobility a viable and sustainable option for everyone. We are constantly working on new solutions that will help shape the future of transportation. In addition to our electric bikes, we are also exploring other segments of the mobility market and developing integrated transportation systems that will make it even easier for people to move around their cities.

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Business Economy

Renault Nissan inks deal with Kamarajar Port

The Renault Nissan Alliance was the first car manufacturer in the region to commence exports of cars through Kamarajar Port….reports Asian Lite News

The Renault Nissan Alliance has signed an agreement with Kamarajar Port Ltd (KPL) for the exports of cars manufactured by their joint venture by Renault Nissan Automotive India Pvt Ltd (RNAIPL) near here.

The agreement was signed by Frank Torres, President, Nissan Motor India and Sunil Paliwal, Chairman and Managing Director, Kamarajar Port Ltd.

The Renault Nissan Alliance was the first car manufacturer in the region to commence exports of cars through Kamarajar Port.

So far, over more than 13 years, the Alliance has exported over 1.15 million cars from Kamarajar Port to around 108 global destinations.

“The global Renault Nissan Alliance has recently announced a new long-term vision for India, increasing production and R&D activities, introducing electric vehicles, and transitioning to carbon-neutral manufacturing. This agreement will help ensure that we are able to further strengthen our exports from India,” said Frank Torres, President, Nissan Motor India and Divisional Vice President Business Transformation AMIEO

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Business Economy

Swiss banking giant UBS to buy Credit Suisse

Credit Suisse's plummeting share price invites comparisons to 2008 global financial crisis

The combination is expected to create a business with more than $5 trillion in total invested assets and sustainable value opportunities…reports Asian Lite News

Credit Suisse will be taken over by Swiss banking giant UBS, the Swiss federal government has announced.

On Friday, the liquidity outflows and market volatility showed that it was no longer possible to restore the necessary confidence and that a swift and stabilising solution was absolutely necessary, the government was quoted by Xinhua news agency as saying.

“In this difficult situation, the takeover of Credit Suisse by UBS is the best solution for restoring the confidence that has been lacking in financial markets recently, and for best managing the risk to our country and its citizens,” the government said on Sunday.

Under the terms of the all-share transaction, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held, equivalent to CHF 0.76/share for a total consideration of 3 billion Swiss francs, UBS said in a statement published on Sunday.

The combination is expected to create a business with more than $5 trillion in total invested assets and sustainable value opportunities, the statement said.

Swiss National Bank (SNB) will provide substantial liquidity assistance to support UBS’s takeover of Credit Suisse, said the Swiss central bank in a statement published on Sunday.

This takeover was made possible with the support of the Swiss federal government, the Swiss financial market supervisory authority FINMA and the SNB, the statement said.

With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation, the statement said.

Both banks have unrestricted access to the SNB’s existing facilities, through which they can obtain liquidity from the SNB, the statement said. (1 Swiss franc = $1.08)

ALSO READ: Stress levels reach worrying highs among delivery boys
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Business Economy India News

Stress levels reach worrying highs among delivery boys

In the world of instant delivery, every other day we hear stories where delivery boys are beaten, abused or assaulted…reports RACHEL THOMAS

Ajay (name changed), working as a delivery boy of a popular online-delivery platform, was rushing to deliver his order, but got stuck in peak-hour traffic and thus was late to deliver his order. He called up the customer to inform his situation.

Instead of being empathic, the customer called up his company to complain. Soon enough Ajay lost his job.

Hamid (name changed) accidentally pressed the doorbell of a house, he was abused. The list is endless.

In the world of instant delivery, every other day we hear stories where delivery boys are beaten, abused or assaulted. Often they have to traverse in the harsh sun, wind and rain; face longer hours of work and traffic snarls.

“There has been a consistent growth in consumer confidence for ordering online, steered by tech-led delivery networks. This, in turn, has unlocked the long-term potential of ready-to-eat food delivery,” Prabhu Ram, Head, Industry Intelligence Group, CMR, told IANS.

“For food delivery startups seeking to attain sustainable and long-term market leadership, this market opportunity requires them to deliver not just on the instantaneous consumer delight, but rather the employee experience as well,” he added.

Owing to their tough workstyle, delivery boys often face a lot of stress, which can affect their mental health.

“Uncertainties of day to day life, life risks, long time periods, financial stress. It certainly impacts mental health. As a result they may engage in unhealthy coping mechanisms like consuming substances or other desperate measures to manage stress,” Mimansa Singh Tanwar, Clinical Psychologist, at Fortis Hospital, told IANS.

“To maintain positive mental health for them, it is important to improve the manager employee relationship where they practise values of empathy, integrity, gratitude and positive encouragement towards them,” she added.

Tanwar suggested that the delivery boys should be incorporated in the employee wellness programmes, and since there is also a connection between money and mental health, financial aids should also be there to support them.

Delivery boys should “focus on what they can control and engage in healthy stress mechanisms like building good support systems through positive family and peer relationships, and avoid engaging in unhealthy consumption of substances,” she noted.

In the movie ‘Zwigato’, helmed by Nandita Das, ace comedian and actor Kapil Sharma plays the role of a delivery boy, and showcases their struggles. Kapil shared that the character made him realise how tough life is for delivery boys, and that he has become more empathetic towards them.

“This movie made me realise the challenges that delivery boys face on a daily basis, and I have learned to appreciate their hard work and dedication even more. I am not saying tip them, but I am just saying that we can at least say a thank you with respect and that will make them happy,” Kapil said.

Meanwhile, several food companies have started several initiatives for its workers. Food delivery platform Zomato recently launched ‘the Shelter Project’ under which the company has set up public resting points where delivery persons can take a break from their exhausting routine and use amenities like the washroom, internet, and phone-charging stations.

In August 2020, Zomato also introduced period leaves of 10 days in a year for its women employees (including transgender people).

Swiggy has rolled out ambulance service for delivery executives and their dependents in the case of emergencies.

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Crisis-hit Pakistan running out of life-saving medicines

The Pakistan Medical Associationdemanded that the government take appropriate measures immediately to save the lives of innocent people in the country…reports Asian Lite News

Expressing grave concerns over the shortage of different medicines including life-saving drugs, the Pakistan Medical Association (PMA) demanded the government to ease the process of opening letters of credit (LCs) for drug manufacturers, Dawn reported.

In a statement issued here on Thursday, the PMA said that it had already warned the government that the failure to open letters of credit (LC) for the import of raw materials would result in an acute shortage of medicine.

The PMA demanded that the government take appropriate measures immediately to save the lives of innocent people in the country, the Dawn reported.

The drug makers have blamed the financial system for the crisis in the healthcare system by claiming that commercial banks are not issuing new Letters of Credit (LCs) for their imports.

The deteriorating economic crisis has badly affected the health care system, the pharmaceutical industry is struggling to replenish its supplies amid a shortage of essential life-saving drugs and other surgical instruments.

Faced with chronic shortages of medical equipment and anaesthetics, doctors at major hospitals are forced to stop performing surgeries, Pakistan Tribune reported.

The lack of forex reserves in the country has affected Pakistan’s capacity to import the required medicines or the Active Pharmaceutical Ingredients (API) used in domestic production.

As a result, local pharmaceutical manufacturers have been forced to slash their production as patients suffer in hospitals. Doctors are forced to not perform surgeries due to the shortage of drugs and medical equipment.

As per Pakistan media reports, the operation theatres are left with NIL stock of anaesthetics needed for sensitive surgeries, including for heart, cancer and kidney. The situation might also result in job losses in hospitals in Pakistan, further increasing the miseries of people.

Pakistan medicine manufacturing is highly import-dependent with almost 95 per cent of the drugs requiring raw materials from other nations, including India and China. For most of the drug manufacturers, the imported materials have been held up at the Karachi port due to a shortage of dollars in the banking system.

The drug manufacturing industry has said that the cost of making drugs is constantly increasing due to rising fuel costs and transportation charges and the sharp devaluation of the Pakistani rupee.

Recently, the Pakistan Medical Association (PMA) called for the intervention of the government to prevent the situation from turning into a disaster. However, the authorities rather than taking immediate steps are still trying to assess the quantum of the shortage.

Drug retailers in Pakistan’s Punjab have said that government survey teams carried out field visits to determine the shortage of crucial medicines. The retailers revealed that the shortage of some common but important drugs is impacting the majority of the customers. These medicines include Panadol, Insulin, Brufen, Disprin, Calpol, Tegral, Nimesulide, Hepamerz, Buscopan and Rivotril, etc.

Earlier in January, Pakistan Pharmaceutical Manufacturers’ Association (PPMA) Central Chairman Syed Farooq Bukhari said that some 20-25 per cent of pharmaceutical production stands sluggish at present, The Express Tribune reported.

He further said, “The worst medicine crisis would erupt in the country if current policies (ban on imports) remain in place for the next four to five-week.

“Earlier this month, the Pakistan government and the IMF staff concluded the ninth review of the USD 6.5 billion bailout package without a staff-level agreement. The Pakistani government had hoped that they would be able to convince the IMF about implementing the conditions in a gradual manner. However, Islamabad’s hopes were dashed during the IMF mission’s 10-day visit to Pakistan. (ANI)

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‘Aviation crisis’ looms in Pakistan

Pakistan Civil Aviation Authority (PCAA) has said it was trying to pay the airlines on time…reports Asian Lite News

The global air transport body has warned of an “aviation crisis” in Pakistan as airlines are struggling to recover $290 million due to a severe financial crisis.

Pakistan Civil Aviation Authority (PCAA) has said it was trying to pay the airlines on time and has been in contact with relevant authorities over the issue, Dawn reported.

The Financial Times, while quoting the International Air Transport Association (IATA) said it has become “very challenging” for carriers to serve Pakistan as they struggle to repatriate their dues which are paid in dollars.

The IATA, which represents some 300 airlines comprising 83 per cent of global air traffic, said $290m were stuck in Pakistan as of January up by almost a third since December, Dawn reported.

“Airlines are facing long delays before they are able to repatriate their funds,” Philip Goh, the IATA’s Asia-Pacific head, was quoted as saying by FT.

“Some airlines still have funds stuck in Pakistan from sales in 2022. If conditions persist that make the economics of operation to a country unsustainable, one would expect airlines to put their valued aircraft assets to better use elsewhere,” Goh added.

The FT citing data from an aviation analytics company Cirium, shared that foreign airlines have been reluctant to return to Pakistan, with fewer total flights scheduled for March 2023 than the same month in 2019.

“If you can’t take money out of a country, then there’s no point in you even going there,” said Mark Martin, chief executive of aviation consultancy Martin Consulting, in the FT report.

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Business Economy

Banking fears spread across global markets

bank.(https://pixabay.com/)

Shares of embattled Swiss lender Credit Suisse were down by more than 20 per cent after its biggest shareholder chose not to increase funding…reports Asian Lite News

The US’ Dow opened the day with a decline of more than 600 points Wednesday as banking fears spread across global markets, reports said.

The S&P and Nasdaq slipped roughly 2 per cent and 1.5 per cent, respectively, CNN reported

Shares of embattled Swiss lender Credit Suisse were down by more than 20 per cent after its biggest shareholder chose not to increase funding. That comes after the bank cited “material weakness” in its financial reporting Tuesday and got rid of executive bonuses, CNN reported.

Shares of US banks also fell: Wells Fargo was down 4.9 per cent and JPMorgan Chase stock dropped 3.6 per cent.

Wall Street continues to grapple with banking tumult domestically, after the collapse of Silicon Valley Bank and Signature Bank rocked markets last week and early this week. While stocks recouped some of their losses on Tuesday, investors remain wary of the banking fallout and what it means for the Federal Reserve’s interest rate-hiking campaign going forward and the overall stability of the financial sector.

Just as the panic over the US banking system appeared to fade, a fresh burst of anxiety blew in from Europe, CNN reported.

Credit Suisse shares crashed more than 20 per cent in Zurich, dragging down European bank stocks along with it. US stock futures fell Wednesday morning after rallying strongly on Tuesday.

“Credit Suisse has been a slowing-moving car crash for years,” wrote Peter Boockvar, chief investment officer of Bleakley Financial Group, as per CNN. “But now today’s news of course is happening in the vortex of SVB.”

The “global bank psychology” is already fragile, Boockvar said. Investors around the world were thoroughly rattled by the collapse of Silicon Valley Bank and Signature, making the banking sector particularly vulnerable to any signs of trouble.

Shares of several top European banks have been halted Wednesday as the fallout from Credit Suisse’s crisis of confidence spilled out throughout the sector, CNN reported.

French and German banks such as BNP Paribas, Societe Generale, Commerzbank and Deutsche Bank were falling, CNN reported.

Several bank stocks were halted, triggering automatic circuit breakers designed to give investors a breather and prevent stocks from rapidly collapsing.

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Al Marri: UAE supports efforts for economic integration

The Minister of Economy added that the UAE reinforced its ability to serve as a strategic partner to India by establishing itself as a leading provider of logistics…reports Asian Lite News

Abdullah bin Touq Al Marri, Minister of Economy, participated in the CII Partnership Summit 2023, which is being held in New Delhi, India, from 13th to 15th March under the theme “Partnerships for Responsible, Accelerated, Innovative, Sustainable and Equitable Businesses”.

The Summit aims to facilitate the exchange of visions and ideas that can support sustainable development efforts and promote the use of technology in driving economic growth.

In his speech, Bin Touq said, “The historic ties between the UAE and India add a unique dimension to our economic partnership. Besides, both countries believe in the potential of fair and sustainable trade that is based on clear foundations and rules. India is one of the most vibrant economies worldwide today and has a wealth of resources, expertise and innovative ideas. Similarly, the UAE’s strengths include its global status as a leading trade, investment and business hub and a gateway to the Middle Eastern and African markets.”

The Minister of Economy added that the UAE reinforced its ability to serve as a strategic partner to India by establishing itself as a leading provider of logistics, financial services and technology. The UAE is India’s third-largest global trading partner today, while India is the second-largest.

He continued, “We are proud of the strong presence of Indian companies in the UAE, and strive to provide them with all enablers for growth and expansion in our markets. People-to-people ties add more value to our partnership, as the Indian diaspora in the UAE is the largest expatriate community in the country that continues to make great contributions to the development of our economy.

The UAE government has adopted an array of measures that have enhanced the resilience of our economy in the face of these challenges. These efforts have led to the establishment of an environment that fosters business growth and attracts investments, the minister elaborated.

These include the granting of 100 percent foreign ownership; issuance of a legislation to protect intellectual property; and the launch of an ambitious strategy to attract talent and skills in all sectors to enhance the UAE’s position as a permanent hub for creativity and innovation.

In addition, the UAE has also launched a set of pioneering initiatives such as the global Investopia platform to create opportunities and enable future investments. Also, the comprehensive economic partnership agreements (CEPA) under which the UAE has signed four agreements so far – with India, Israel, Indonesia and Turkey.

“Negotiations with more strategic markets are currently progressing,” the minister added.

He pointed out that the adoption of such forward-looking policies has enabled the UAE’s real GDP to grow by 7.6 percent in 2022. Besides, FDI inflows to the country amounted to US$171.6 billion, The country’s non-oil foreign trade also witnessed unprecedented growth as it crossed the AED2 trillion and AED233 billion mark for the first time in its history with a 17 percent year-over-year growth. This confirms the efficiency of the initiatives and strategies of the UAE government.

The Minister of Economy underlined the importance of the comprehensive economic partnership between the UAE and India, and its role in boosting trade flows between the two markets. The trade deal has cancelled or reduced customs duties by 90 percent on goods and commodities traded between both countries.

He explained that they cover nearly 95 percent of the value of commodities that each country imports from the other, which will accelerate the growth of non-oil trade to amount to US$100 billion per annum over the next five years.

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